Gold at $4,000: Momentum or Madness?
Sunday, October 19th 2025
Gold has once again captured the global spotlight — this time by storming past the once-unthinkable $4,000 per ounce threshold. After eight consecutive weeks of gains, the precious metal’s relentless climb has left analysts divided: is this a healthy continuation of a powerful bull market, or the prelude to an overdue correction?
The Journey to $4,000: A Week of Thrills and Volatility
The week began calmly enough, with spot gold trading near $3,890, but momentum built quickly. Within hours, buyers pushed prices past $3,940, and before long, the metal breached multiple resistance levels, touching $3,974 during the Asian session.
A series of sharp pullbacks and rebounds followed — but the real fireworks came Tuesday night, when Asian markets sent gold soaring beyond $4,000, marking a new psychological and technical milestone. By midweek, the metal had reached $4,060, its highest level in history.
Despite a late-week retracement toward $3,950, strong dip-buying carried gold back above the $4,000 line heading into the weekend — a fitting close to one of the most dramatic trading weeks in years.
Wall Street Turns Cautious, Main Street Moderates
According to Kitco’s Weekly Gold Survey, sentiment among professional traders has cooled. Roughly half of Wall Street’s bullish camp shifted to neutral after gold’s record run, while Main Street investors also trimmed their optimism for the coming week.
Still, nearly 70% of retail participants remain confident that the rally isn’t done yet.
“All Hell’s Breaking Loose,” joked Darin Newsom, senior market analyst at Barchart.com, echoing the market’s chaotic energy.
Bulls See Momentum; Bears See Gravity
For many, gold’s meteoric rise feels like a momentum story that hasn’t fully played out.
“You don’t have to look far to see momentum firmly on the side of the bulls,” said Rich Checkan, president and COO of Asset Strategies International. “Just look at how quickly gold and silver recovered from profit-taking. One day later, it’s like nothing happened.”
Checkan pointed to ongoing geopolitical tensions, the U.S. government shutdown, and expectations of another rate cut as key catalysts keeping gold buoyant.
But not everyone is convinced. Ole Hansen of Saxo Bank warned that a pullback may be necessary before the market can regain balance.
“Gold is unlikely to see a ninth consecutive weekly gain,” Hansen said. “We may need a correction to determine how much of this move is real demand versus FOMO.”
Technical Watch: The $3,950 Line in the Sand
Analysts now view $3,950 per ounce as a critical support level. A clean break below it could trigger further short-term weakness, according to Lukman Otunuga of FXTM.
“The short-term charts are flashing signs of a potential correction,” Otunuga said. “Still, political risks — particularly the U.S. shutdown and upcoming remarks from Fed Chair Powell — could easily send gold back above $4,000.”
Market Mood: Between Euphoria and Unease
Veteran trader Sean Lusk of Walsh Trading described the current environment as “insanity in the metals markets.” He said long positions remain dominant, fueled by fear of missing out among both institutional and retail investors.
“Buyers don’t want to give up control,” Lusk said. “Even at these overbought levels, gold keeps getting new momentum from the retail crowd — something we didn’t see in 2011.”
He compared today’s rush into gold to previous speculative manias, noting the ease of trading through new online platforms and micro contracts has amplified volatility.
Analysts Divided: Rally or Reckoning?
Jim Wyckoff of Kitco expects the metal to enter a sideways, choppy phase, suggesting bulls might soon tire. Meanwhile, Michael Moor of Moor Analytics believes that unless prices reclaim higher technical formations, short-term pressure could build.
Marc Chandler of Bannockburn Global Forex noted that gold’s latest move seems “decoupled” from traditional drivers like the dollar or Treasury yields — instead behaving more like a momentum asset.
“It’s no longer just a safe-haven play,” Chandler said. “It’s trend-following behavior at this point.”
The Bigger Picture: De-Dollarization and Structural Change
Some analysts see deeper, long-term forces at work. Adam Button, head of currency strategy at Forexlive.com, called this rally “decades in the making.”
“This is validation for gold bugs,” Button said. “De-dollarization and global currency debasement are fueling a long-term shift. Central banks have quietly decided that gold is the safer asset — this is a generational realignment.”
Button believes the rally could extend well beyond $4,000:
“$4,000 is a bull market. $10,000 would be a bubble. But we’re not there yet.”
The Central Bank Connection
Alex Kuptsikevich of FxPro added that central banks’ diversification away from the dollar has accelerated gold’s ascent.
“The share of gold in global reserves now exceeds that of the euro,” he noted. “If it reaches parity with the U.S. dollar, prices could theoretically soar to $8,500 per ounce.”
Kuptsikevich emphasized that gold’s rally is not just a fiat story — it reflects a deeper shift in global asset allocation driven by political turmoil and fiscal instability.
Looking Ahead: What’s Next for the Gold Rush?
The week ahead may bring less economic data due to the U.S. government shutdown, but key reports like the Empire State Manufacturing Survey, the Philly Fed Survey, and comments from Fed Chair Jerome Powell could set the tone for gold’s next move.
Despite talk of overextension, few analysts are ready to call a definitive top. As Marc Chandler summarized:
“Sentiment remains bullish, and buying the dip is still the dominant strategy.”
At last check, spot gold traded at $4,008.57, up nearly 4% on the week, as traders brace for another round of high-stakes volatility.
Bottom Line
Gold’s charge beyond $4,000 has rewritten the rules of the precious metals market. Whether it’s a momentum-driven surge or the start of a structural revaluation, one thing is clear — the era of gold complacency is over.
